Economic hopes let US interest rates rise
There is a strong correlation between real interest rates in the US and the development of the gold price. The real interest rates are the nominal interest rates traded on the market minus the inflation rate. When it comes to nominal interest rates, one looks primarily at the US government bond with a term of ten years. In the past week, the price of this bond fell, so the yields rose. Real interest rates had previously reached a record low. On August 6, the US Treasury Department calculated this to be minus 1.08 percent. Just one day later, the gold price hit its new record.
It fell by 200 USD
In the days that followed, the price of the precious metal fell by $ 200 while real interest rates rose again. The answer to the question of when and how strong a recovery of the US economy from the corona crisis will begin should be decisive for the further development of interest rates in the USA and thus also the price of gold. Progress in the development of vaccines against the virus, the hope for another economic stimulus package and at the same time data from the US labor market, which were not as bad as expected, led to a rethinking of the bond and stock markets in the past week. Cyclical sectors that had been neglected until then suddenly became the focus of equity buyers. The rally in previously strong technology stocks stalled.